By René van Loon

The most important lecturer was the American, Lutheran evangelist Dr Frank Buchman, leader of the Movement for Moral Rearmament. When Buchman entered the big hall and saw the flags and national costumes of many countries, he called out: ‘Where are the Germans?’ The public reacted with shock, upon which he continued: ‘Where are the Germans? Some of you think that Germany has got to change; and that is true. But you will never be able to rebuild Europe without Germany.’ [1]
In the years that followed Caux remained a meeting place for European leaders. Thanks to the Mountain House and the efforts of Buchman, Dr Konrad Adenauer, who would later become the Federal Chancellor of Germany, and the French premier Robert Schuman, got to know each other. Together they developed a daring plan: the peace between France and Germany would be furthered by economic cooperation and intertwining. With this vision the European Coal and Steel Community (ECSC) was established 18 April 1951. Besides France and Germany, Italy and the Benelux countries also joined the ECSC.
The leaders at that time were emphatically aware, that Europe had been a powder keg throughout the ages. Wars without number have been fought between the diverse super powers: Germany, England, France, Italy, Spain. The establishment of the ECSC was a historic step on the way to a new future and peace for Europe was its main goal. Economic cooperation was seen as a means to attain that main goal. That the ECSC would also benefit the wealth of a continent impoverished by war was an important additional goal.

Europe as a power bloc
In the decades that followed, the goals of European policy shifted. The longer the peace in Europe lasted, the more this peace was taken for granted. Besides the ECSC, the EEC was established, the European Economic Community. What had at first been an additional goal, increasing wealth by economic cooperation, gradually became rather the main goal. The EEC was transformed into the European Community (EC) that grew to become the European Union by the Treaty of Maastricht in 1993.
Apart from the goals of peace in Europe and increasing wealth, a third goal arose along the way. Europe had the ambition to become a significant power factor on the world stage. Certainly after the collapse of communism, the desire grew to formulate an answer to the hegemony of the United States of America in the world. Europe wanted to be able to counter the US politically and the US and Japan economically, as well as the rising People’s Republic of China. In this light the plan arose of introducing a single European currency, a strong currency, that would globally at least be equally in demand as the Dollar and the Yen.

The plan to introduce a single currency in a union of sovereign states was doomed to fail from the beginning. Anyone with a certain understanding of economics would know that a single currency requires a central policy, executed by a central government. The power of a currency is like the grade a government gets for its policy. When a country structurally maintains a large public debt, the value of the currency diminishes. If it manages to limit public debt, that benefits the value of the currency. But still other factors are in play. When the policy of a government stimulates export, this benefits the value of the currency. The dynamics of wages and prices has an influence on the value of the currency, as does the development of the interest rates. The introduction of the Euro therefore had to be accompanied by the formation of a single, strong, European government. But this is not what happened. Mutual agreements were made, concerning among other things the height of public debt. Those agreements were violated by large member states such as Germany and France already within a few years. The die was cast. The countries within the Euro zone had to sustain the value of the Euro together. Such as system entices individual countries to skimp the rules, hoping that others do fully live up to them. It is like a group of pupils who have to make a project together and will be graded as a group. In such as group there will always be those who do a lot of work, who make an effort, but there will also always be free riders, that trust that the others will do the work.

Did politicians at the time not foresee that a single currency without a central policy had to lead to problems? Undoubtedly they did see this coming. But the single currency would always succeed. If no crisis were to occur, everyone would be content. And if a crisis were to occur, the public opinion in Europe would be ripe for the formation of a centralised European government. The Euro would be a lever that would bring nearer the formation of the United States of Europe.

Picture: Signature in Paris of the Treaty establishing the European Coal and Steel Community (ECSC): Van Zeeland (B) Belgian Foreign Affairs Minister, Bech (L) Luxembourg Foreign Affairs Minister, Meurice (B), Sforza (I) Italian Foreign Affairs Minister, Schuman (F) French Foreign Affairs Minister, Adenauer (D) German Chancellor and Foreign Affairs Minister, Stikker (NL) Dutch Foreign Affairs Minister, Van Den Brink (NL).

The Euro as a goal in itself
In the mean time the crisis has become a fact. And indeed: many opinion leaders, economists and politicians rightly draw the predictable conclusion: If we want to save the Euro, we will have to move towards a centralised European government. The former Belgian premier Guy Verhofstadt is one of the most passionate defenders of this position.

The question is though, what again were the original goals of European cooperation. The thesis ‘If we want to save the Euro, we have to move towards one European government’ takes the Euro as a starting point. But the Euro is not a goal in itself. The Euro is a means. And the question is: What European goal does the Euro actually serve? Does the Euro serve peace (the first goal), economic prosperity (the second goal) or the power of Europe in the world (the third goal)? This third goal is clearly served with the single currency. The second goal, economic prosperity, according to many politicians is also served by it. But whether this is actually the fact remains to be questioned. Countries such as Denmark, Sweden, the United Kingdom (within the EU) and Norway and Switzerland (outside the EU) are certainly not performing less good economically than countries that have the Euro. It is mainly the free trade agreements that have furthered the prosperity of Europe, rather than the Euro.

And the first goal, peace in Europe, is this served with the Euro and thus with a single European government? This is in fact the main question, which at the same time seems to be overlooked by most politicians. Peace is taken for granted! The Second World War is only a spec in the rear view mirror of European history at the most. The current generation of politicians grew up after the war and knows little else than that there is peace.

Whoever analyses the developments in Europe, shall soon have to assert that a single European government will summon up new tensions within the powder keg that is Europe, which bring with them great risks for the future of this continent. For a single European government will have to keep member states at bay with harsh means. This means that drastic measures will have to be taken with regard to national budgets and the national policy of the individual countries. We have witnessed this summer what consequences this has: great social unrest in countries such as Greece, Spain and Italy. The people in these countries get the feeling that the enormous budget cuts have been imposed by Europe as a foreign, abstract entity. Brussels is a far-away, Northern-European city. Even if the unrest does not lead to explosions of violence or terrorism (which is not imaginary), than the unrest will still inevitably lead to anti-European sentiments. Through the democratic process the anti-European sentiments will translate into the government policy of these countries. The consequence is a move in the direction of European disintegration.

This is not all. A single European economic policy would inevitably entail the richer regions structurally contributing to the poorer regions. Introducing Eurobonds for example would lead to equal interest rates in the entire Euro zone. This means that governments and citizens in countries with a solid monetary policy would have to pay more interest, and that interest in countries with a flawed policy would drop. All in all, this means the ‘solid’ countries would end up subsidising the ‘squanderers’. Now, the reality is that within each country poorer regions are structurally supported by richer regions. In the Netherlands for example, there is a continuous flow of money from the urbanised provinces in the west to the more peripheral provinces. This does not lead to protests though, because there is a great social and cultural cohesion within the Netherlands. This bond is strong enough to defray the cost of this solidarity. We only have to look across our border though, to Belgium (Guy Verhofstadt’s country!) to see that solidarity comes to an end when there are great cultural differences. Flanders has been a net contributor to Wallonia for decades now and is fed up with it. The consequence has been a complete stalemate in Belgian politics.
Within Europe the cultural differences are much greater still than within Belgium. Richer countries such as the Netherlands and Germany will certainly not be willing to contribute structurally to countries such as Italy and Greece. This applies even more to countries such as Romania and Bulgaria, both countries that are EU member states and obligated to join the Euro as soon as they meet the EU’s monetary standards. In Europe there will never come to exist such a sense of unity as there is for example in the United States of America. The United States have one language and are culturally much more similar than the European nations. If there is ever to be something like the United States of Europe, this entity will always remain a patchwork of cultures, languages and historical backgrounds. In any case there will be insufficient cohesion, to form a basis for structural help from one region to the other.
The history of the EU has demonstrated this sufficiently. Within the EU there are numerous aid funds in a number of areas. Subsequent Dutch governments have complained in Brussels, that the Netherlands is contributing more to these funds, than it receives from them. When it comes to money, it turns out the solidarity does not run very deep.

A single European government, necessary for maintaining a strong single currency, will in the long term lead to increasing tensions within Europe. These tensions will lead to the disintegration of the European Union, with as most extreme scenario violence, terrorism or even war. The history of our continent shows that this danger is not at all imaginary. Europe always has been and remains a powder keg.

Back to peace as a goal
What policy makers in Europe are to do now, is to return to the original goal of lasting peace in Europe. Economic prosperity will again have to be seen as an additional goal, subject to this goal of peace. Because of this peace, the European Union is of the utmost importance. Exactly to assure the continued existence of the EU in the long term, it is important that no further centralisation of power takes place. A continent like Europe, with many peoples, proud of their own language and culture, asks for a form of cooperation that leaves space to national sovereignty. A good balance should be found again between the power of the member states and the power of the Union. In this balance the member states will have to retain the space to carry out their own policies, also in the socio-economic area. If it turns out that in this scenario the Euro cannot be sustained in the long term, politicians should show the courage to question the single currency. Suggestions have already been made to split the Euro into a ‘Neuro’ for the northern countries and a ‘Seuro’ for the southern countries. Even further unstrangling may be inevitable. This will no doubt mean that Europe and certain European politicians will lose face. But the question is what really matters: image or the future of this continent. Peace is more important than the Euro.

René van Loon is a political economist and theologian. An abridged version of this article was originally published in Dutch in the Nederlands Dagblad. Translation by Jonathan van Tongeren.

[1] Michael Henderson, The Spirit of Caux. Moral Re-Armament/Initiatives of Change in Switzerland. Retrieved at http://www.peoplebuildingpeace.org/thestories/print.php?id=152&typ=theme on Octobre 7, 2011.